PrimeEnergy(PNRG) - 2024 Q3 - Quarterly Report

Reserves and Production - As of December 31, 2023, total proved reserves amounted to 29,046 MBoe, with 13,558 MBoe developed and 15,488 MBoe undeveloped[66] - Average net daily production was 7,181 Boe, with West Texas contributing 6,172 Boe, Mid-Continent 831 Boe, and Gulf Coast 173 Boe[66] - In the Mid-Continent region, the company has 2,210 MBoe of proved reserves, representing 8% of total proved reserves[68] - The Gulf Coast region has 563 MBoe of proved reserves, accounting for 2% of total proved reserves[67] - At year-end 2023, the Company had 15,488 MBOE of proved undeveloped reserves attributable to 52 undeveloped wells, with 28 in the process of being drilled or completed[79] Investment and Development - The company completed 56 new horizontal wells in 2024, investing approximately $141 million, and plans to invest about $84 million in another 30 horizontal wells for 2025[70] - The company is currently participating in the completion of 6 horizontal wells in Upton County, Texas, with an average 47.52% interest, expecting to spend approximately $35 million[70] - The Company invested approximately $30 million in nine horizontal wells in West Texas, with an average interest of 47.8%[73] - The Company has plans for additional Wolfcamp D drilling, potentially setting up the development of as many as 36 horizontals on its acreage in Reagan County[94] - The company anticipates investing over $300 million in horizontal development in West Texas from January 2024 through December 2027[95] - The Company has invested a total of $141 million in 56 wells completed by early September 2024, with an additional planned investment of $48.4 million in 24 new horizontal wells in West Texas for 2025[121] Financial Performance - The company reported a net income of $53.13 million, or $29.88 per share, for the nine months ended September 30, 2024, compared to $22.22 million, or $11.95 per share, for the same period in 2023, reflecting increased production and oil prices[98] - Oil, gas, and NGL sales increased by $31.99 million, or 99.88%, to $64.01 million for the three months ended September 30, 2024, compared to $32.02 million for the same period in 2023[99] - The company produced 1,883,000 barrels of oil for the nine months ended September 30, 2024, an increase of 1,069,000 barrels, or 131.33%, from 814,000 barrels in the same period in 2023[101] - Average oil price received was $77.39 per barrel for the nine months ended September 30, 2024, compared to $75.42 per barrel in 2023, reflecting a 2.61% increase[104] Expenses and Taxes - Production and ad valorem taxes increased by $1.2 million, or 83.39%, to $2.6 million for the three months ended September 30, 2024, compared to $1.4 million for the same period in 2023[105] - Depreciation, depletion, and amortization expense increased by $22.9 million, or 100.57%, to $45.8 million for the nine months ended September 30, 2024, from $22.8 million in 2023[108] - General and administrative expenses rose by $2.8 million, or 34.34%, to $10.8 million for the nine months ended September 30, 2024, compared to $8.1 million in 2023[109] Asset Management and Acquisitions - The company is actively pursuing acquisitions of producing properties to diversify and broaden its asset base[58] - The company maintains a balanced portfolio of assets, with primary sources of liquidity being cash generated from operations and a credit facility[57] - The Company sold 368 net mineral acres and 7.8 surface acres in Midland County, Texas in 2023, receiving gross proceeds of $436,050 and recognizing a gain of $47,000[122] - In the second quarter of 2024, the Company sold 12 net acres in Lea County, New Mexico for proceeds of $150,600, and an additional 2.29 surface acres in Odessa, Texas for $68,000[126] - The Company sold its south Texas well-servicing business for $2,800,000 in the third quarter of 2024[128] Credit and Compliance - The Company has a credit agreement with a reserves-based line of credit totaling $300 million, with a current borrowing base of $115 million and outstanding borrowings of $22.1 million as of November 14, 2024[115][129] - The next borrowing base review for the credit agreement is scheduled for December 2024, which may affect the borrowing capacity based on commodity prices and operational performance[115] - The Company is in compliance with financial and operational covenants of its credit agreement and expects to maintain compliance over the next twelve months[115] Historical Performance - In 2023, the Company participated in the drilling and completion of 35 horizontal wells, with an investment of approximately $91 million, 99% of which was for wells in West Texas[89] - In 2022, the Company participated in eight horizontal wells with an investment of approximately $4 million, all brought into production in August 2022[75] - At year-end 2022, the Company had 6,366 MBOE of proved undeveloped reserves attributable to 25 horizontal wells[77]